Convention Centers: The Next 20 Years

Michael Hughes -- Tradeshow Week, 9/12/2005

Convention centers have made a remarkable transformation. Over the past 20 years, they have moved from concrete boxes with architecture reminiscent of the old Soviet Union, to grand, high-tech icons. They once had little room for the ancillary services that today's event attendees are starting to take for granted: contemporary food and beverage outlets, sit-down restaurants, business centers, electronic signs and high-tech meeting rooms.

Since the late 1980s and early 1990s, there has been a sea change in convention center design and management, driven by cities hoping to differentiate themselves from competitors with boring old boxes for venues. The transformation was so rapid, and on such a large scale, that what was cutting-edge a few years ago is now commonplace.

Today, nearly every major city has at least two or three high-quality convention centers and hotel exhibit halls. The differentiation problem is gone. In fact, the venue market has been commoditized once again.

The just-released 2005 Tradeshow Week Major Exhibit Hall Directory reports that the venue building boom continues. Nearly all these new venues will have state-of-the-art telecommunications technology, dramatic façades, spacious atriums and ample exhibit and meeting space. The issue is not so much whether there is too much exhibit space, but whether the quality of the space has improved so much that venues need to either add more amenities and services or come up with an even more spectacular design.

Many venue managers talk about distinguishing themselves with better customer service. TSW just surveyed a wide range of convention center and hotel exhibit hall managers, and all of the respondents said the quality of their customer service is very important to their success.

Besides looking at customer service delivery, many venues are also discounting to help close sales, especially to the largest and most important quarter of the convention and exhibition market: shows with the greatest potential economic impact. Competition is particularly acute at the high end of the market, for midsize to large association conventions and tradeshows.

With such a highly evolved venue marketplace, the challenge is to fight a new wave of commoditization. There are three ways to do this:

• Change the model. One way to decommoditize a product offering is to target a new market. Convention center success should not be judged primarily by hotel bookings. Venue managers have little to no control over filling hotel rooms.
  By changing the economic model, convention centers can more directly serve the community that provided the upfront funding. Hotels are having a near-record year in the same cities where many major convention centers are not. Why, then, are such large community investments in venues designed mainly to benefit private hotel companies?
  An important part of this shift is to focus more on serving the regional community. For example, make the venue a destination in its own right. Develop a place that charges admission with a learning lab and a guest lecture series, educational workshops, movies and concerts.
  Among other ideas for new revenue streams: semi-permanent auto shows, local product and service showcases; more cultural or art exhibits, all with admission fees. Regional sports, business and cultural halls of fame, and Web or video game access via video walls are other possibilities.
• Enhance service to event producers. Admittedly, changing the convention center management, marketing and funding model is a tall order. Offering new products and services to event producers is likely a more viable immediate strategic move.
  Even with good attendance growth, the challenge for event producers is attracting high-quality attendees. Think in terms of developing services you can provide to event producers — not freebies. Offer services that would command market or premium rates from show producers.
  Some of these services could be marketing material development and consulting, graphics and sign production, public relations, booking entertainment or on-site attendee research via self-administered kiosks or interviewers.
  Move from being the show site to being the indispensable partner.
• Design and functionality enhancements. The evolution of convention center design and functionality will also continue. Venue managers, contractors and architects working on the largest, most important new venues and major expansions are taking more time to study the needs of show producers and exhibitors during the pre-development stage. The Las Vegas Convention Center development team is doing this now in-depth.
  As power shifts from event owners and exhibitors to attendees, the next phase of convention center development will have to take visitor needs into greater consideration. As the Internet continues to evolve, the face-to-face marketing and educational medium will only become more important. We are seeing this today as the Internet ravages other media while events thrive.
  More and more attendees and exhibitors will need events to provide the only area of economic activity that the Web cannot: in-person interactions and transactions. This will require buildings and environments designed to foster closer, more personal interaction.
  In the past, venues were all about holding vast events, and this will always be the case. But real value in the future will come from fostering smaller personal connections.